Dialogue Theme 2003: Stimulating Investment in Network Development

The consensus of the participants at the WDR Expert Forum was that the Dialogue Theme for 2003 should focus on investment and the roles of the regulator in helping to stimulate investment in network development. This stems not only from the desperate need for network rollout in most developing countries, and the concerns for broadband upgrading in developed countries, but also from the drying up of investment funds for the telecom sector in the wake of the ICT sector stock market collapse and the corruption in the US industry.

The precise formulation of the theme was not determined at the Forum, and further advice is welcomed. Although regulation relating to telecom reform, information infrastructure development, next generation Internet, e-commerce and related matters is not directly associated with investment per se, clearly these regulations help create the environment and the incentives for investment. A proactive approach to regulation will prompt a serious investigation into the areas where policymakers and regulators can consider specific actions and rules that will stimulate network development. Possibilities range from steps to strengthen the independence and credibility of the regulator, to enhance opportunities to participate in network development and to compete with incumbent operators, to improve the efficiency of the regulatory process, and to clarify rules where ambiguity exists, e.g., on interconnection and access conditions.

We have a number of examples where well thought out policy and regulation has stimulated a wave of investment in network development. Chile introduced an imaginative programme of reverse subsidy auctions for serving rural areas. Morocco introduced a clear and transparent process for licensing mobile operators that directed their competition to rapid network rollout. In Denmark minimum barriers to entry and a clear commitment by the regulator to rapid unbundling of the local loop stimulated the incumbent to upgrade its national network for broadband services ahead of the rest of Europe. Korea has adopted a number of strategic policy and regulatory rules to stimulate investment in both mobile and broadband rollout. Unfortunately, these are exceptions to the norm.

A research agenda and dialogue around the theme of stimulating investment in network development needs to be structured more precisely to be fully effective. We will be doing this over the month of October and welcome your help to shape the specific issues that will take priority in the WDR Dialogue for 2003.

Figure 1 - Machine for attracting, extracting, pumping in and storing investments. Designed by Expert Forum participant Mario Bonatti, Skodsborg, September 13, 2002.

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Dialogue Theme 2003: Stimulating Investment in Network Development